REGINA — Agriculture Minister Gerry Ritz is promising to set up a “crop logistics working group” to deal with transportation and supply chain issues arising from the government’s plan to remove the Canadian Wheat Board’s monopoly over western wheat and barley sales next August.
Speaking to the Inland Terminal Association of Canada in Saskatoon on Monday, Ritz conceded the removal of the CWB’s single desk will pose significant challenges to the wheat supply chain, including independent inland terminals that handle about 2.5 million tonnes of grain and oilseeds annually in Saskatchewan and Alberta.
“During our extensive consultations, industry has raised a number of valid issues around transition (to the open market),’’ Ritz told ITAC members, who represent 10 inland terminals, seven of which are in Saskatchewan, and their 5,000 shareholders, most of whom are producers.
Among those issues affected by the removal of the CWB’s single desk are: access to elevators, rail and ports, producer cars and shortline railroads, funding market development and research, and price transparency and “price discovery,’’ Ritz said.
The crop logistics working group will help develop solutions to the issues of terminal access, rail access, producer cars and other “transportation and supply chain issues arising from the transition to marketing freedom,” in conjunction with the grain supply chain study and rail freight service review, Ritz said.
The Battlefords-Lloydminster MP admitted the transition to the open market will mean major changes in the way the grain industry operates. “As we all know, nothing good ever comes easy. Changes brings challenge, but it also brings opportunity,’’ Ritz said in his speech to ITAC delegates.
ITAC executive director Kevin Hursh agreed that transition from the single desk to an open market is a “complicated issue, but perhaps the working group will be able to monitor for any anti-competitive activity.”
But Terry Boehm, president of the National Farmers Union, said the Conservative government is rushing into the open market without considering the impact on producers or the industry.
“Ritz and the Harper government are moving very quickly,’’ Boehm said. “They’re not making any sort of informed decisions as to how you reconstruct or maintain valuable pieces of the infrastructure that we have.’’
Boehm said with the elimination of the single desk, the CWB will no longer play a major role in grain transportation and logistics, such as providing producers with access to grainhandling facilities, or allocating producer cars and ensuring the railways to move them to port.
Allen Oberg, chair of the CWB, added announcing the crop logistics working group at this late date is an admission that the government’s plan to eliminate the single desk was politically motivated and not well thought out.
“Normally, you would look at all the implications and, having seen those, you’d introduce the changes later,” Oberg said. “This has the cart before the horse, as far as I’m concerned.’’
For example, he said the legislation doesn’t explain how “third parties’’ — companies without country elevators or port terminals — will be guaranteed access to the grainhandling system. Similarly, producer cars — which save producers about $14 million annually in reduced grainhandling charges — will slowly fade away without the support of the CWB.
“Once the system is deregulated, they will be on the same footing as canola producer cars are today,’’ Oberg said. “The economics of shipping grain by producer car will be taken right out of it.’’